Newsmakers

Meir Statman, Glenn Klimek Professor of Finance, weighed in on the presidential election’s potential emotional and economic impact in an article recently published in Fortune. The article, titled, “Trump or Clinton: These Stocks Should Do Well No Matter Who Wins,” pointed to the uneasiness in investors who worry that their party’s defeat could negatively affect their investment portfolios. Professor Statman, whose research focuses largely on behavioral finance, warned against such emotionally-blinded judgments.

An excerpt from the piece:
Neither euphoria nor depression is great for decision-making. “People’s positive sentiment when their party is in power leads them to think the world will deliver higher returns with lower risk,” says Santa Clara University professor Meir Statman, an expert in behavioral finance. One study looked at the behavior of about 60,000 investors from 1991 to 2002 and found that people took greater market risks when their party controlled Washington. Investors affiliated with the party out of power, on the other hand, tended to grow restless and trade more frequently, hurting their performance.”

Read the full article here»

Learn more about Professor Meir Statman»